This is how I lost good money using a stop loss on Binance crypto currency exchange
What is a stop-loss?
A stop-loss is a telling the exchange to sell you holding in a certain coin you are holding so that you don't lose too much money if the coin's price goes into free fall as you are sleeping or away from the computer. That sounds like a good idea but in my case it backfired.
I had a substantial holding in QSP Quantstamp a couple of weeks ago. I was reasonably sure it would be profitable. But I put a stop-loss sale notification for 15% below the current price, just in case.
The next day I checked the price of QSP and indeed it had risen considerably and was still going up. I was overjoyed. Success! So I logged into my Bianance account to see how much I had already made. To my horror, I had no QSP in my account. The price had dipped overnight below the 15% before shooting up. What this meant is that I actually lost money, 15% of my investment.
I could have cried. But I didn't. I'm a man after all ;). Consider it a lesson learnt.
Yes, stop-losses can save you a lot of money if the coin your investing in tanks. But watch out for those dips before shooting up. They can lose you a lot of money too.
I will only consider a stop-loss now if the selling price will still earn me a small profit. So I wait for a coin to go up in price first before putting one in.
If you are getting into cryptos I hope my painful lesson will help you avoid the dumb mistake I made.
Follow my channel and I will give you a pick of 5 coins that I'm will stake my reputation on. Based on these analysing a wide range of factors, these coins are going to double or more in value over the next month. But that is for tomorrow's post.